Gold holds weaker below 4-month peaks, weighed down by rebounding USD

   •  Goodish USD rebound prompts some profit-taking move.
   •  US bond yields exerting some additional downward pressure.
   •  Reviving safe-haven demand limits further downside. 

Gold traded with a mild negative bias for the second consecutive session and retreated farther from 4-month highs touched on Monday. 

A goodish US Dollar rebound was seen exerting some downward pressure on dollar-denominated commodities - like gold. Adding to this, positive tone surrounding the US Treasury bond yields further contributed towards driving flows away from the non-yielding yellow metal.

The downside, however, remained cushioned by the prevalent cautious sentiment around equity markets, which was seen lending some support to the precious metal's safe-haven appeal and helped limit deeper losses, at least for the time being.

Looking at the broader picture, the price action might still be categorized as a consolidation phase, especially after the recent run-up of over 8.5% from near 5-month lows touched in December. Hence, it would be prudent to wait for a sustained move in either direction before initiating any fresh positions.

Technical levels to watch

A follow-through weakness below $1330 zone, the commodity seems to accelerate the corrective slide towards $1322 horizontal level en-route its next major support near the $1311-10 region.

On the upside, sustained momentum beyond $1340 level could get extended towards the $1350 area ahead of 2017 yearly highs resistance near $1357-58 region, touched in September.